NOTABLE MOVES
- U.S. CB Consumer Confidence at 137.9 vs expected 136.3. 2-yr and 10-yr Treasury notes added two basis points each to 2.84% and 3.11% respectively. USDJPY up 0.61%, $113.06.
- German Prelim CPI m/m at 0.2% vs expected 0.1%. E.U. Prelim Flash GDP q/q at 0.2% vs expected 0.4%. Adding to Euro woes, Italian GDP in Q3 showed no growth, with Italian Deputy PM Salvini stating that the GDP slowdown is another reason to press ahead with the budget expansion. Euro down -0.25%, $1.1345.
- Broad Dollar strength, political woes in the Union, and the absence of progress in Brexit negotiations all weighed on Sterling, with no fresh catalyst behind Tuesday’s slump. Sterling dropped -0.68%, $1.2706.
- Aussie Building Approvals m/m at 3.3% vs expected 3.9%. Aussie up 0.68%, $0.7104.
- S&P 500 up 1.57%, 2,682.63. Nasdaq up 1.43%, 6,810.12. Nikkei up 1.45%, 21,457.29.
- Tuesday’s price action in the S&P 500 oscillated with the volatility in large-cap technology stocks before finally taking a decisive swing upwards in the last hour of trading. The tech-heavy Nasdaq Composite, which had been down approximately -0.7% intraday, closed at its session high with a 1.43% gain.
- Philadelphia Semiconductor Index climbed 4.2%. Notable chipmaker NVDIA (NVDA 203.00, +17.38) jumped 9.4% after J.P. Morgan analyst Harlan Sur upgraded the stock to overweight from neutral. He thinks that investors are underestimating secular gaming trends, as more than 30 new titles are set to be released in the next two quarters and as e-sports continue to gain in popularity.
- Amazon (AMZN 1530.42, -8.46, -0.6%) was the only FANG member to post a loss. In earnings, Dow components Pfizer (PFE 42.89, -0.34, -0.8%) and Coca-Cola (KO 47.63, +1.17, +2.5%) both reported better-than-expected profits. Pfizer, however, lowered its revenue guidance, while Coca-Cola reaffirmed its guidance. Additionally, former Dow component General Electric (GE 10.18, -0.98) fell -8.8% to its lowest level in nearly a decade after missing top and bottom line expectations and cutting its quarterly dividend from $0.12 per share to $0.01 per share. Under Armour (UAA 23.23, +5.04) soared 27.7% following a better-than-expected earnings report. Facebook shares whipsawed in after-hours trading, following a mixed third-quarter earnings report Tuesday. Earnings per share (EPS): $1.76 vs $1.47 estimated. Revenue: $13.73 billion vs. $13.78 billion estimated. Facebook’s shares were down as much as -6% and up as much as 5% after hours as investors dissected Zuckerberg’s comments on future spending and growth. They finally settled in positive range, up about 3%, after the company’s earnings call concluded.
EARNINGS NEWS
BLOCKCHAIN & CRYPTOCURRENCY NEWS
U.K.’s Financial Regulator Mulls Ban on Sale of Crypto Derivatives
The U.K.’s Financial Conduct Authority (FCA) has said it will consider whether to ban the sale of cryptocurrency-based derivatives. The watchdog is reported to have said it will now launch a consultation in the first quarter of 2019 into whether or not to place a ban on their sale in future. The regulator’s remarks came the same day as a new report published by the Cryptoassets Taskforce – which includes representatives from the FCA, the U.K. Treasury and the Bank of England – emphasized that leveraged crypto-based derivatives were even riskier than spot market trading as they can amplify and “cause losses that go beyond the initial investment,” as well as imposing additional fees. The FCA reportedly plans to launch a parallel consultation into whether to extend its regulatory jurisdiction to crypto assets themselves, as well as to infrastructure providers such as exchanges and wallet services.
Bitcoin ‘Patient Zero’ Says BTC’s Current Stage is Like ‘1992 for The Internet’
Bitcoin “Patient Zero” Wences Casares, the founder of Bitcoin (BTC) wallet startup Xapo, said that the seminal cryptocurrency may take years to prove successful. Casares forecasted that it will take at least seven years to determine whether BTC is successful, and if it does, BTC will become a non-political global standard of value and settlement. Notably, the Bitcoin advocate said that it will not replace fiat currencies as “it does not make sense.” He added that the idea that a blockchain can “change the idea of an asset, that already derives its value from a central authority […] its really nonsensical and does not make any sense.” Regarding blockchain, Casares stated in January that there would eventually come about a single “robust” blockchain to move value globally. Per Casares, the future of crypto lies in the cooperation around a singular, robust blockchain, and in his opinion BTC is the most likely to be the blockchain of choice.
Bitcoin Is ‘Anything but Useful’ Says Ex-Federal Reserve Chair Janet Yellen
Bitcoin is “anything but” a useful store of value, former U.S. Federal Reserve chair Janet Yellen stated in a speech during an interview at the 2018 Canada FinTech Forum in Montreal. Yellen – who rose to fame in the cryptocurrency community last year as the target of the now infamous ‘Buy Bitcoin’ session, called Bitcoin a “highly speculative asset” and “not a stable source of value.” She also noted that the Fed was not “seriously considering” the concept of a state-issued digital currency at the time of her engagement.